Avoid Backlash from Board Restructuring

Sometimes, to comply with the law, association boards must be restructured. If you find yourself in the position of having to deliver the news and help with the restructure, you could be faced with accusations by board members that you’re improperly trying to oust them for your own motives. For example, if you’ve had difficulty working with the current board members, they could assume that you’d like to replace them with members who will be more accommodating. The laws that apply to condo association and HOA board term limits vary from state to state. So, before talking with the board about the situation, make sure you understand exactly why and how you must comply with the law. It can help head off any arguments that you’re pursuing the restructuring for personal or professional gain or ease.

Example: Your condo association’s board members have three-year terms, according to its bylaws. But you learn that your state’s Condominium Act has been amended to outlaw multi-year board terms, including three-year terms. The only exemption contained in the statute is for associations that want to establish staggered terms. In order to establish staggered terms under the law, however, several conditions must be met. First, the terms can’t exceed two years. Second, the authority for two-year staggered terms must be contained in the association’s bylaws. Finally, the operation with two-year staggered terms must be ratified.

Let’s say that, in your case, none of these things ever occurred. Even if someone properly elected in the year that the law was amended, let’s say 2013, has been “grandfathered” for a three-year term, his term would expire in 2016—and possibly already. Accordingly, all of your directors are probably serving improperly. The board should be cleaned up at the earliest possible time, such as an upcoming annual meeting. There may be pushback from current board members who say that, rather than resign at this year’s annual meeting, they should be allowed to serve out the time as stated in the bylaws. Stress to them that to comply with state law, they’re required to resign. Remind them that they may run for re-election if they wish, provided that your bylaws don’t contain term limits.